When it comes to best judgement assessment, an assessing officer conducts his assessment based on his reasoning and the information at his disposal. It is made either ex-parte or by rejecting the plea or accounts of the concerned assessee. In such cases no records or documents are furnished and claims are not substantiated. Records and evidence produced before the proper officer are rejected, whether wholly or partly, due to unreliability, incorrectness or incompleteness.
“Assessment” means the process of determining the tax liability under GST Act, 2017. It includes various type of assessment like:
There are 2 parts to best judgement assessment:
Let’s understand best judgement assessment in case of unregistered persons first:
There are two cases in which the best judgement assessment of an unregistered person can be undertaken by the proper officer under section 29(2):
The order to conduct best judgement assessment shall be passed:
In case of non-filers, the best judgement assessment can be initiated if the registered taxable person fails to file any of the below mentioned returns (which are applicable to him considering the business structure and transactions):
Then, the proper officer shall first issue notice u/s 46 of the CGST Act requiring the registered taxable person to furnish the return within a period of 15 days.
If, even after issuing such notice u/s 46, the registered taxable person fails to furnish the return, the proper officer may issue the order to the best of his judgement within a period of 5 years from the due date of the annual return for that particular year to which the tax not paid relates.
Where the registered person furnishes a valid return within thirty days of the service of the assessment order issued above, the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 (not exceeding 18%) or for payment of late fee under section 47(Levy of late fee) shall continue.
Where the registered person furnishes the valid return within 30 days from date of issue of Best Judgement Assessment order- the assessment order shall be deemed to have been withdrawn but the person shall be required to pay interest and penalty thereupon, according to the provisions relevant to such payment.
Please note that in both the cases where the order of Best Judgement Assessment is passed by the proper officer and the proceedings for the same are underway, the commissioner, if he is of the opinion that, for the purpose of protecting the interest of the government revenue, it is necessary so to do, he may, by order in writing provisionally attach any property, including bank account belonging to the taxable person.
1. A registered taxable person liable to file return fails to do so.
2. The proper officer issues a notice to him u/s 46
3. The proper officer waits for 15 days from the date of issue of notice
4. After the expiry of above-mentioned period, the officer may conduct best judgement assessment
1. A taxable person liable to register, fails to do so
2. The proper officer may choose to conduct assessment
3. The officer issues an assessment order within a period of five years from the due date for filing of the annual return for the year to which the tax not paid relates.
GST ASMT – 15 Form is issued by the proper officer to issue an order of assessment made under Best Judgement Assessment.
We hope that this guide has helped you understand how and when the best judgement assessment under GST is conducted.